We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold Wabtec (WAB) Stock in Portfolio Now
Read MoreHide Full Article
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) is being aided by solid liquidity and higher Freight revenues. However, escalating expenses are worrisome.
Factors Favoring WAB
Wabtec’s top-line performance (up 13.9% year over year in first-quarter 2023) continues to benefit from solid growth across its Freight segment’s revenues (up 18.5% year over year). Segmental growth was backed by strength across all product lines, with solid improvement in Equipment, Digital Electronics and Services.
For 2023, Wabtec expects sales in the range of $8.7-$9 billion. Our estimate is currently pegged at $8.88 billion.
WAB's debt/equity ratio (in terms of percentage) is currently pegged at 31.5. The reading compares favorably to the S&P 500's 58.4. This implies that WAB is not a highly leveraged company.
Key Risks
High operating expenses are hurting Wabtec's bottom line. Evidently, total operating expenses in the first quarter of 2023 increased $33 million to $389 million. The operating ratio (operating expenses as a percentage of revenues) deteriorated 70 basis points from the year-ago quarter to 17.7%.
Zacks Rank & Key Picks
Currently, WAB carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) .
Copa Holdings, which presently sports a Zacks Rank #1(Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 669% and 65% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022.
Management expects revenues to remain strong in 2023 as well. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis. For second-quarter and full-year 2023, ALGT’s earnings are estimated to rise 328% and 182%, respectively, on a year-over-year basis.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Hold Wabtec (WAB) Stock in Portfolio Now
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) is being aided by solid liquidity and higher Freight revenues. However, escalating expenses are worrisome.
Factors Favoring WAB
Wabtec’s top-line performance (up 13.9% year over year in first-quarter 2023) continues to benefit from solid growth across its Freight segment’s revenues (up 18.5% year over year). Segmental growth was backed by strength across all product lines, with solid improvement in Equipment, Digital Electronics and Services.
For 2023, Wabtec expects sales in the range of $8.7-$9 billion. Our estimate is currently pegged at $8.88 billion.
WAB's debt/equity ratio (in terms of percentage) is currently pegged at 31.5. The reading compares favorably to the S&P 500's 58.4. This implies that WAB is not a highly leveraged company.
Key Risks
High operating expenses are hurting Wabtec's bottom line. Evidently, total operating expenses in the first quarter of 2023 increased $33 million to $389 million. The operating ratio (operating expenses as a percentage of revenues) deteriorated 70 basis points from the year-ago quarter to 17.7%.
Zacks Rank & Key Picks
Currently, WAB carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) .
Copa Holdings, which presently sports a Zacks Rank #1(Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 669% and 65% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022.
Management expects revenues to remain strong in 2023 as well. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis. For second-quarter and full-year 2023, ALGT’s earnings are estimated to rise 328% and 182%, respectively, on a year-over-year basis.